Consolidated Worksheet at End of the Second Year of Ownership (Equity Method) On January 1, 20X8, Pierce Corporation acquired 90 percent of Sharp Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Sharp at that date. Pierce uses the equity method in accounting for its ownership of Sharp, On December 31, 20X9, the trial balances of the two companies are as follows: Pierce Company Sharp Corporation Debit Credit Debit Credit Current Assets 225,500 $ 145,000 Depreciable Assets 300,000 225,000 Investment in Sharp Corp. 144,000 Depreciation Expense 30,000 25,000 Other Expenses 180,000 85,000 Dividends Declared 40,000 10,000 Accumulated Depreciation $ 150,000 $ 100,000 Current Liabilities 45,000 20,000 Long-Term Debt 75,000 90,000 Common Stock 100,000 75,000 Retained Earnings 282,500 80,000 Sales 253,500 125,000 Income from Sharp 13,500 $ 919,500 $ 919,500 $ 490,000 $ 490,000 Required: 1) Give all equity method entries required on December 31, 20X9, to prepare consolidated financial statements. 2) Give all consolidating entries required on December 31, 20X9, to prepare consolidated financial statements. 1. Equity Method Entries: Investment in sharp cash Record Pierce Co.'s % share of Sharp Co.'s 20X9 income Record Pierce Co.'s % share of Sharp Co.'s 20X9 dividend Investment in Sharp Co. Income from Sharp Co. Ending Balance Ending Balance NCI Income to NCI Ending Balance Ending Balance Common Stock Retained Earnings Beginning Balance Beg Balance Ending Balance Post-Closing Balance 2. Elimination Entries: To reverse equity method entries made during the year and return Investment account to the beginning of year balance To record the changes to NCI during the year To eliminate the Investment account